Price has continued to move higher as was expected for the session by both Elliott wave counts.
Summary: A short term target is now at 1,307. The final target is still at 1,320.
The trend still looks to be upwards. Pullbacks are an opportunity to join the trend.
Always use a stop. Invest only 1-5% of equity on any one trade.
New updates to this analysis are in bold.
Last monthly charts and alternate weekly charts are here, video is here.
Grand SuperCycle analysis is here.
MAIN ELLIOTT WAVE COUNT
WEEKLY CHART
Click chart to enlarge.
The Magee bear market trend line is added to the weekly charts. This cyan line is drawn from the all time high for Gold on the 6th of September, 2011, to the first major swing high within the following bear market on the 5th of October, 2012. This line should provide strong resistance.
To use this trend line in the way Magee describes, we should assume that price will find resistance at the line if it gets back up there. If the line is breached (by at least one or two full daily candlesticks above it), it will be signalling a major trend change from bear to bull. At that point the alternate Elliott wave count should be preferred.
At this stage, a triangle still looks possible and has the best fit for cycle wave b. It has strong support now from declining ATR and MACD hovering about zero.
Within a triangle, one sub-wave should be a more complicated multiple, which may be primary wave C. This is the most common sub-wave of the triangle to subdivide into a multiple.
Intermediate wave (Y) now looks like a developing zigzag at the weekly chart level, and minor wave B within it shows up with one red weekly candlestick. Primary wave C may end at the Magee trend line.
Primary wave D of a contracting triangle may not move beyond the end of primary wave B below 1,123.08. Contracting triangles are the most common variety.
Primary wave D of a barrier triangle should end about the same level as primary wave B at 1,123.08, so that the B-D trend line remains essentially flat. This involves some subjectivity; price may move slightly below 1,123.08 and the triangle wave count may remain valid. This is the only Elliott wave rule which is not black and white.
Finally, primary wave E of a contracting or barrier triangle may not move beyond the end of primary wave C above 1,295.65. Primary wave E would most likely fall short of the A-C trend line. But if it does not end there, then it can slightly overshoot that trend line.
Primary wave A lasted 31 weeks, primary wave B lasted 23 weeks, and primary wave C may now have just completed its 34th week. A double zigzag may be expected to be longer lasting than single zigzags within a triangle, and so this continuation of primary wave C is entirely acceptable and leaves the wave count with the right look at this time frame.
DAILY CHART
Click chart to enlarge.
A target for primary wave C to end is calculated using the most common Fibonacci ratio between minor waves A and C. If the target is wrong, it may be too high; there is very strong resistance about 1,305 to 1,310. At this stage, the target at 1,320 may see upwards movement end about the Magee trend line.
Along the way up, corrections should find final support at the lower edge of the blue Elliott channel.
Minor wave C may only unfold as a five wave structure, either an impulse or an ending diagonal. An impulse is much more common and will be expected until shown otherwise by price.
Within an impulse for minor wave C, the corrections of minute waves ii and iv would most likely show up on the daily chart, like they do within minor wave A. Minute waves ii and iv within minor wave A both lasted two sessions, so they may also last about two to three sessions within minor wave C.
Minute wave ii now shows up with two red daily candlesticks. It has a typical look.
Within minute wave iii, no second wave correction may move beyond its start below 1,267.72.
HOURLY CHART
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Another five wave impulse upwards looks to be completing. Because it has not yet moved above the end of minute wave i, this may not be minute wave iii in its entirety. This five wave impulse upwards looks most likely to be only minuette wave (i).
An Elliott channel is drawn in orange about the upwards wave of minuette wave (i). When this channel is breached by downwards movement, it would indicate that minuette wave (i) should be over and minuette wave (ii) should then be underway. At that stage, draw a Fibonacci retracement along the length of minuette wave (i). Minuette wave (ii) may only correct to the 0.382 Fibonacci ratio. There may then be enough of a strong upwards pull from the middle of a third wave to force minuette wave (ii) to be more shallow than usual.
Minuette wave (ii) may not show up on the daily chart because it may be over relatively quickly. It may not move beyond the start of minuette wave (i) below 1,267.72. Minuette wave (ii) may offer another entry opportunity to join the upwards trend at a good price.
Minute wave iii may only subdivide as an impulse and it must move above the end of minute wave i at 1,291.36. When minute wave iii is complete, then the next correction for minute wave iv may last about two days and must remain above minute wave i price territory at 1,291.36.
The target for minute wave iii remains the same. A Fibonacci ratio of equality with minute wave i is used because it fits with the higher target for minor wave C to reach equality in length with minor wave A.
ALTERNATE ELLIOTT WAVE COUNT
WEEKLY CHART
Click chart to enlarge.
This wave count has been published only in historical analysis. At this stage, it will be published on a daily basis.
There are more than 23 possible corrective structures that B waves may take, and although cycle wave b fits best at this stage as a triangle (main wave count), it may still be another structure. This wave count looks at the possibility that it may be a double zigzag.
If cycle wave b is a double zigzag, then current upwards movement may be part of the second zigzag in the double, labelled primary wave Y.
The target remains the same as previously published for this wave count.
Along the way up, some resistance should be expected at the cyan Magee trend line. Because this wave count requires price to break above the Magee trend line, it must be judged to have a lower probability for this reason. This trend line is tested multiple times and goes back to 2011. It is reasonable to expect price to find resistance there, until proven otherwise.
Within intermediate wave (C), no second wave correction may move beyond the start of its first wave below 1,205.41.
DAILY CHART
Click chart to enlarge.
Intermediate wave (C) may be unfolding as an impulse.
Within the impulse, minor waves 1 and 2 would now be complete. Minor wave 3 must unfold as an impulse, and within it minute waves i and now ii would also be complete.
A-B-C of a zigzag subdivides 5-3-5, exactly the same as 1-2-3 of an unfolding impulse. The hourly chart now for both Elliott wave counts would be exactly the same in terms of subdivisions and short term expectations. The blue channel which should provide support for any deep pullbacks would also be exactly the same.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Last upwards week has support from volume. Look out for strong resistance now close by. A pullback about 1,305 to 1,310 is a reasonable expectation.
On Balance Volume gives a weak bullish signal. This supports both Elliott wave counts.
ADX and ATR both support the main weekly Elliott wave count. This is what a triangle should look like.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
There is support today from volume. This is a good bullish sign.
On Balance Volume will be watched carefully tomorrow. If it breaks above resistance, it would offer a reasonable bullish signal. The signal would be reasonable because the line has been tested four times and is close to horizontal. On Balance Volume is right on the line today, not yet above.
Although Stochastics reached overbought and there exhibited divergence with price, it has now returned into neutral territory. It may now return to overbought, or it may equally as likely continue lower to oversold. But it does not have to swing all the way down to oversold here.
GDX
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
This market has been trendless for a long time now as a large triangle completes. Descending triangles most commonly break out downwards, but this is contradicted by volume during this triangle being strongest for upwards days.
With Stochastics now again overbought and exhibiting divergence with price, and price close to resistance, it looks like GDX may have a little pullback tomorrow.
Published @ 06:00 p.m. EST.
Hi Lara,
What about possibility that since approx. July 17, we have been rising in a Leading Diagonal in a wave i Minute, now to correct to possibly to .618 retrace?
Thank you…Melanie
Or… an ending diagonal for minor C.
Will chart a diagonal and see how it subdivides. It’ll be an alternate if it fits.
As Patrick notes below, the target for minute iii now at 1,307 does not look right. There’s not enough room for it to complete and only end at the target.
Minuette wave (i) is now complete, minuette (ii) now looks to be a zigzag which may end about the 0.618 Fibonacci ratio of minuette (i).
This current downwards movement is back within minute i price territory, so this pullback cannot be minute iv because it may not overlap back into minute i price territory.
And so this is another second wave correction.
Which means when it’s done explosive upwards movement to start next week.
Hi Lara
just looking at the chart, looks like green (i) = 32.28~ pts
even at the wave (ii) retrace of 1280, 1280 + 32.28 would equal 1312.28 for green (iii) with (v) still to go but pink iii has a target of 1307
am i missing something?
Also there would be virtually no room for green (iv)
Thanks for your insight
The target for minute iii will have to change.
No, you’re not missing anything.
Question for the board
I’m confused as to the labelling of this count.
Looks like current wave (i) ended at ~1300 this am
So this wave up was ~33 pts
Is there are reason why at this stage wave (iii) is expected to = (i) as opposed to a 62% extension?
It almost feels like there won’t be enough room for all the wave to complete while remaining below 1320
what am i missing?
thx
You’re right, there is not enough room now. The target at 1,307 doesn’t look high enough for minute iii.
I used the ratio of equality for minute iii because 1,307 fits with the higher final target for primary C to end at 1,320, which fits with the Magee trend line.
I am expecting extremely strong resistance at that line.
Thx Lara
That was a quick correction of minuette wave (i), couple points shy .618. ? double zig-zag.
i have 1280 as .618 correction for minutte wave (i) Daniel. I think it hit 50% so far.
Yes. Just barely over 50%. So may see temporary up move followed by another leg down to 1280 region. Looking for it to pop to middle of channel then down again.
Oil has made what looks like an impulsive move up like a minor wave 3 like move. Oil is such a tricky beast
Thats why I only have a small short position to give it room to work to downside.
GLD looks like it will open above the june 6th high
and ~20 cents shy if the 23.50 pivot
Looking potentially quite bullish
The miners still look lethargic in premarket. Watch that purple trendline on the GDX chart posted earlier. It comes in around 23.30ish.
GDX needs to break above that and right now it looks like it will open near that price.
If GDX can’t break above that trendline, that’s another sign that this move up in Gold has no legs. If we have a real upwards breakout in Gold as many technical analysts are suggesting, then the miners should be showing more strength.
Maybe they catch-up. We need to wait and see.
I’m guessing that some of you are looking for a bigger pullback so that you can buy. Based on the fact that Gold price just blew through Lara’s 1,290 target on the hourly chart and the new squiggles that I’m seeing, I think we may have an extended 5th wave.
Now this doesn’t change the overall 1,320 target, but it does possibly mean that there won’t be much of a pullback on the way to that target. If this scenario is correct, there will only be shallow 4th wave corrections along the way. Then when we get to the Minute 4 correction, it too will be shallow, although it will likely last longer (maybe a triangle, let’s see).
That’s the problem with hourly counts, you need to be nimble as the facts are always changing. So if you are long, watch the green channel on this chart. As long as price stays in it, we go higher. That’s my view anyway. Good Luck all!
https://www.tradingview.com/x/ibGppktv/
Thanks Dreamer, your update is much appreciated as I’m nervously waiting for a pull back to add to position.
Since your comment Dreamer, downwards moment is now back in minute i price territory.
That means minute iii still can’t be over, because this can’t be minute iv.
Assuming current cycle wave b target (1275) what is the estimated target for super cycle wave (a )?
Slightly below 1045???
Reasonably below 1,045. A target cannot be calculated until cycle wave b is complete.
looks like minuette 1 will be finished soon.
Eli made a comment about the weakness in miners yesterday. I agree.
Here’s a look at some trendlines for GDX. We are kinda in no where’s land.
To have confidence in a more bullish count, the purple downtrend line that has been in place since February needs to be broken to the upside. Conversely, if the short term pink uptrend line is broken to the downside, that would be bearish.
A bit treacherous to trade now.
Watching…
https://www.tradingview.com/x/C0174BAv/
Patrick and Kyong, I replied to your posts on the last analysis. Sorry for the delay.
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